Commodity Futures Trading Commission could face staff cuts

Just when it was ramping up to implement Wall Street reforms, the Commodity Futures Trading Commission could face personnel cuts now as a result of its budget approved last week by Congress.

It’s a remarkable situation that underscores the relentless guerrilla war the White House faces in trying to get the resources it wants to take on the multitrillion-dollar derivatives market. It also puts the House Appropriations Committee in a pickle at a time when conservatives already accuse its Republican leadership of being too responsive to President Barack Obama’s demands.

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POLITICO 44

Indeed it was the House GOP negotiators — opposed to the Dodd-Frank financial reforms enacted last year — who drove the CFTC budget bargain and held the 2012 appropriation to $205.3 million, a virtual freeze at 2011 levels and a one-third cut from Obama’s request.

In normal circumstances — especially given recent federal pay freezes — the agency might have rolled with the punch. But in this case, the CFTC’s flexibility is limited by the fact that the same deal specifies that more than a quarter of its budget, or $55 million, must go to long-term information technology investments.

That’s an almost 50 percent increase for IT over 2011, and the result is to squeeze what’s left for salaries. Administration officials told POLITICO that the shortfall is close to $14 million and upward of 60 workers — 8 percent of the CFTC’s current staff — are now at risk.

“Right now, the math doesn’t work,” Bart Chilton, a CFTC commissioner, said in an interview. “Instead of powering up to meet a mandate from Congress, we could be powering down.”

The White House weighed in Friday, saying the budget as now structured “will lead to layoffs of essential personnel” and a legislative “fix” must be made in the next appropriations bill.

And the concern is enough that CFTC Chairman Gary Gensler addressed the issue in a memo to the agency’s staff Monday morning.

“This agency is committed to and will finalize new rules of the road to make the swaps market more transparent and safer for taxpayers,” Gensler wrote. “Last week, Congress passed the fiscal 2012 budget only modestly raising CFTC funding while at the same time walling off an additional $18 million for technology, thus potentially affecting resources available for staff. We will be reviewing budget options, and along with the Office of Management and Budget, will continue to advocate with Congress for necessary resources. I want to assure you that we’re fighting to keep every one of our talented staff on board. “

Georgia Rep. Jack Kingston, the chief House Republican negotiator, said he didn’t construct the deal with this outcome in mind but welcomes the fact that it maximizes his own leverage over the CFTC’s rule making on the derivatives and swaps market.

The House-passed bill included no such IT set-aside, but when it was added in the talks, “we drew a tight circle around IT,” Kingston told POLITICO. The administration can seek reprogramming requests, Kingston said, but that will also allow him to remain “engaged” with Gensler on rule making.

“I prefer to deal with it through reprogramming,” Kingston said. “Gensler is an engaging guy, and it allows for oversight.”

Kingston, who likes to speak of the CFTC chief as “Mr. Goldman Sachs Gary Gensler,” casts himself as a practical populist in the fight and says the CFTC’s budget problems are exaggerated. In fact, the agency’s 2010 appropriation was $168.3 million, so the new budget represents a 21 percent increase in less than two years. And the House had voted to cut back CFTC spending to $171.9 million or close to the pre-Dodd-Frank levels.

Readers' Comments (24)

Banksters are not going to allow authorities to have monies to keep a watch on their business transactions or to get close to shutting down their "cash cow"!

It's OK to borrow $$$Trillions$$$ for WAR.

How dare our Gov't/Banks have a regulating authority over the very culprit that caused this whole global economic collapse.

Isn't our Gov't pledging $600 million for MF Global investors as recently as this week but the very agency designed to manage companies like MF Global cannot get enough money to staff the agency for oversight.

I'm glad for this article from Politico but People are not truly informed enough to understand the importance of the CFTC or this aritcle and how it truly affects them.

This article does not truly express how Wall Street is exploiting this little known Commision that monitors dirivatives and swaps to the tune of TRILLIONS of dollars up to the point that it dwarfs our whole countries GDP in the TRILLIONS of dollars.

If the Teaparty supporters only knew that this issue right here is what spawned their movement from the TARP bailouts they would be screaming from the top of their lungs.

This little know Commision is at the nucleus of http://www.occupyr.com/news.ph... Although its just one of the issues of OWS, its still the main culprit of our global economic collapse.

Every level of Gov't from State and Federal levels should be screaming to the top of their lungs to support the CFTC because they themselves and their constituents are enduring all of the economic downturn from how such a small agency is responsible for monitoring such large amounts of risks that can obviously effect so many Americans and people all around the world.

I hope that everyone would take the time to investigate the 2 links I've posted from my msgs and do their homework on understanding the importance of the........CFTC. It would shock and awe you!

But.....most probably it will get shuffled as inconsequential because it doesn't have the big names and titles like POTUS, Speaker of the House, FBI, CIA, HSA or Federal Reserve......and thats just the way Wall Street would like to keep it.

I'm glad for this article from Politico but People are not truly informed enough to understand the importance of the CFTC or this aritcle and how it truly affects them.

This article does not truly express how Wall Street is exploiting this little known Commision that monitors dirivatives and swaps to the tune of TRILLIONS of dollars up to the point that it dwarfs our whole countries GDP in the TRILLIONS of dollars.

If the Teaparty supporters only knew that this issue right here is what spawned their movement from the TARP bailouts they would be screaming from the top of their lungs.

This little know Commision is at the nucleus of http://www.occupyr.com/news.ph... Although its just one of the issues of OWS, its still the main culprit of our global economic collapse.

Every level of Gov't from State and Federal levels should be screaming to the top of their lungs to support the CFTC because they themselves and their constituents are enduring all of the economic downturn from how such a small agency is responsible for monitoring such large amounts of risks that can obviously effect so many Americans and people all around the world.

I hope that everyone would take the time to investigate the 2 links I've posted from my msgs and do their homework on understanding the importance of the........CFTC. It would shock and awe you!

But.....most probably it will get shuffled as inconsequential because it doesn't have the big names and titles like POTUS, Speaker of the House, FBI, CIA, HSA or Federal Reserve......and thats just the way Wall Street would like to keep it.

YOU'RE SPOT ON and particularly the last point... tea partiers that will show as well GOP supporters, most of them, will post all manner of childish crap as they do everythread regardless of subject- it's what they're told to do by their handlers. disrupt, distort, hijack and make everything about the president and how he has failed... even as we know they must spin and distort to that too.

Yes, we must "fix" this - wouldn't want to lay off any Government bureaucrats. Luckily, Obama may be preoccupied with one of his own looking like he could be frogmarched out of office ...http://bit.ly/qVdDUt

A shame and a scam.2 political parties waiting at the money trough 2 keep their power.Thats how the system is rigged to the special monied intrests.If there is 2 horses in the race and you want to win what is your best wager.Bet on both horses.

A shame and a scam.2 political parties waiting at the money trough 2 keep their power.Thats how the system is rigged to the special monied intrests.If there is 2 horses in the race and you want to win what is your best wager.Bet on both horses.

That the CFTC is facing budget restrictions and staff reductions bares naked the total corruption of Republicans in Congress. We are in downward spiral and the only possible correction at this point is for voters to oust misguided, wrongheaded, or corrupt Republicans from Congress. Failing that, hunker down Americans, it going to be a very rough ride! ~ richard allbritton, Miami, http://rallbritton.blogspot.co...

It's under the complete authority of the Treasury Dept. A Cabinet position under the presidents authority.

How can a "Nations" bank not be under the authority of our full Gov't.......of the people, for the people and by the people.

Alan Greenspan purposely ran a Gov't deficit to give the Federal Reserve a relevance. Otherwise if our Nation had any surpluses then President Bush would send out $250.00 checks to every american citizen and the 1% wealthiest Americans would receive a Tax BREAK!

Because of the speculative fear that if the Gov't broke up a TBTF Bank it may cause a domino effect throughout the Banking "industry" ...............perhaps.

Were alot of peoples 401K's at risk......perhaps

So it's banking as usual for Citi Bank where they give themselves bonuses for doing the same math that 3rd graders do. Therefore Citi Bank can continue to LEVERAGE its capital (money in the bank) more than it is allowed by LAW into the Dirivatives Market which falls under......you guessed it.......CFTC!

Our Country or our Gov't cannot fully fund this regulatory agency but it can provide $600 million to safeguard and protect investors in MF Global is BS if you think the Captains of Finance don't have a clue as to what OWS is about.

They (Wall Street and Captains of Finance) know what Occupy Wall Street is about but they insist on being coy because the American public are not attuned to what the CFTC is and what they do.

For every Homeowner that has lost their home......this is where your mortgage was traded and why Banks cannot produce your mortgage deed to your property!

To all the "Captains of Finance" I'm here and ready and will be on your toes and at your doorsteps everytime there is a News article about your exploitation of American Citizens. Know this and embrace it!

WTF everyone wants to read my comments but because they are strong and articulate all of a sudden I can't get a good argument from Repugnants/Tea party/Fox News listeners and the like.

Where are my adversaries that dispute my comments ???

Is there no one that approves or can "disprove" my arguments because I can do this all day every day!

Where's Chris Wallace from Fox News.....did ruppie tell you not to speak in opposition........you know he's an aussie that thought he could BUY the 1st Amendment from Americans.....lolz He's an idiot! Tell him I said so or..........I'd be more than willing to tell him myself in person if he can stay awake longer than he did during the dissolution of the longest running Newspaper in London's inquiry :o) What a joke of a human being :o)

America needs to know that EVERY BANK in AMERICA is deeply involved in the CFTC and its not by coincidence! Banks funnel $$$ Trillions of dollars through CFTC and the american public doesn't even know how Banks exploit them through this Agency!

If Barney Frank is against these cuts .I like them . This guy is not to be trusted. He is one of those official who do not like to pay his income tax. He is also one of the official supporting all those stupid bail out and sitting in Obama pocket .He is also should be investigated for his dealing with the finance company. I think they should cut more from the CFTC . Make them operated with the same budget they had in 2008. We all have to tight our spending . They need to do the same. Walter

Never in our history has it been so important to beef up our trading watchdogs. Republicans are fighting against it, for they want to "unleash Wall Street" -- their words! I'm not sure I could survive another round of Wall Street being unleashed on me. We have new financial regulations to help prevent another stock market crash and Great Recession or Great Depression. We now need our President's appointment to head the new consumer protection bureau confirmed, and we need a bigger staff to regulate and oversee all these new financial instruments Wall Streeters love to play with so recklessy. If we don't learn from our most recent economic meltdown and take needed preventive measures against it happening again, we are asking for another one and we are going to get it.

Never in our history has it been so important to beef up our trading watchdogs. Republicans are fighting against it, for they want to "unleash Wall Street" -- their words! I'm not sure I could survive another round of Wall Street being unleashed on me. We have new financial regulations to help prevent another stock market crash and Great Recession or Great Depression. We now need our President's appointment to head the new consumer protection bureau confirmed, and we need a bigger staff to regulate and oversee all these new financial instruments Wall Streeters love to play with so recklessy. If we don't learn from our most recent economic meltdown and take needed preventive measures against it happening again, we are asking for another one and we are going to get it.